For some struggling Filipino individuals and families, taking loans is the last straw for survival. Unfortunately, this immediate need for money is often taken advantage of by some predatory lending apps accessible to anyone with a phone and an internet connection.
In a report by McAfee, known for its antivirus, the mobile research team found a significant global increase in SpyLoans, or predatory lending apps, and potentially unwanted programs (PUP) on Android phones.
These applications can be used for various social engineering tactics to gain users’ sensitive information or unnecessary app permissions, leading to extortion, harassment, and even financial loss. In the same report, the Philippines is among the top 10 countries with SpyLoan apps in Q3 2024.
In this post, let’s talk about SpyLoans and how we can avoid becoming victims of these apps.
What are SpyLoan apps?
McAfee defined SpyLoan apps as intrusive financial applications that lure users with promises of quick and flexible loans, often featuring low rates and minimal requirements. These apps are easy to access, install, and take a loan.
Does this sound familiar? If yes, it’s because the Philippines also has an ongoing problem with SpyLoans, which we often refer to as “Online Lending Apps” or OLA.
These predatory lending apps are often mentioned in news reports as more people report them to the respective agencies, like DICT, SEC, Google, and other involved institutions. This leads to a crackdown on these predatory and unregistered lending apps.
How to identify SpyLoan apps
Various SpyLoan apps vary from country to country, but according to McAfee, here are common characteristics:
1. Distribution via official app stores
These predatory lending apps are often unregistered by the SEC but somehow manage to be listed in official app stores like Google Play. This makes them easier to search for and download and makes them appear trustworthy. For instance, cybersecurity firm ESET reported about 17 predatory lending apps on Google Play in different languages last year.
2. Deceptive marketing
These apps typically use attractive and legit-looking ads on social media, like Facebook, to entice new users to download them. They may also use AI to create deepfake videos of celebrities to make them appear legitimate. They may even offer promises too good to be true, like low interest and minimal requirements.
In the Philippines, it’s common to see these kinds of advertisements on free mobile apps and games.
3. Privacy agreements
These apps would try to look legitimate by showing privacy terms and agreements with the user. However, since people rarely read these technical agreements, they miss critical conditions, like giving consent to collect information, like SMS message content, call logs, and contact lists.
4. Excessive permission requests
These lending apps may also request more permissions than necessary. For example, a report by the National Privacy Commission found that some lending apps access users’ mobile phonebooks without the user’s consent. The online lenders would then use the list to inform the people on the phonebook that they were named as co-borrowers or character references.
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Impact of SpyLoans on its users
Users who are victims of SpyLoans often experience added stress on top of their financial obligations, which can affect their daily lives:
1. Receiving threats to their safety and security, or even their lives, for delayed payments.
2. Harassment of their friends and family members after accessing their personal information.
3. Receiving defamatory posts on social media, including their names, pictures, and other personal information.
What to do if you became a victim?
While it’s true that the borrowers owe these lending apps money, it’s also important to know that people have the right against unfair collection practices, including harassment, threats, and disclosure of personal information to the public.
If you ever become a victim of these predatory lending companies, you should remain calm to avoid clouding your judgment.
Afterward, you may also file a formal complaint against them on the proper regulatory agencies (depending on the merits).
How to protect yourself
Here are some ways to protect yourself from SpyLoans and predatory lending apps.
1. Make sure that you turn on Google Play Protect.
2. Always check for security updates for your Android devices.
3. Uninstall untrusted apps from your phone.
4. Stay away from online lending apps and use legitimate lending institutions.
5. Avoid downloading apps and games through untested third-party websites.
For many Filipinos, borrowing money has become a lifeline, even if they have to use online lending apps. However, it’s essential to protect yourself from SpyLoan and predatory lending apps that will take more than just money. They may also affect your mental health and dignity.